Teaching of MEXC contract trading

Contract trading on MEXC can empower traders to access leverage and speculate on future asset price movements, offering potential returns but also significant risk.

Nov 16, 2024 at 02:06 am

Teaching of MEXC Contract Trading: A Comprehensive Guide for Beginners and Advanced Traders

Contract trading, also known as derivatives trading, has become an integral part of modern financial markets. By utilizing contracts, traders can speculate on the future price movements of underlying assets, such as cryptocurrencies, stocks, indices, and commodities. This guide aims to provide a comprehensive overview of contract trading on MEXC, one of the leading global cryptocurrency exchanges.

Understanding Contract Trading Terminologies

• Contract: A derivative financial instrument that represents an agreement between two parties to buy or sell an underlying asset at a specified price on a future date.
• Underlying Asset: The asset on which the contract is based, such as Bitcoin, Ethereum, or the S&P 500 index.
• Leverage: The use of borrowed funds to amplify potential returns and losses.
• Long Position: A bet that the underlying asset price will rise.
• Short Position: A bet that the underlying asset price will fall.
• Expiration Date: The date on which the contract expires and must be settled.
• Settlement Price: The price at which the contract is settled on its expiration date.

Steps to Begin Contract Trading on MEXC

1. Create an Account: Sign up for a MEXC account and complete the KYC (Know-Your-Customer) verification process.
2. Fund Your Account: Deposit cryptocurrencies or fiat currencies into your MEXC spot wallet to fund your contract trading account.
3. Access the Contract Trading Terminal: Navigate to the "Contracts" section of the MEXC website or mobile app.
4. Choose a Contract: Select the contract that соответствует the underlying asset and expiration date you wish to trade.
5. Set Your Position: Determine the position size (number of contracts) and whether to open a long or short position.
6. Manage Your Position: Monitor your position as the market moves and adjust your stop-loss and take-profit orders accordingly.
7. Settle Your Position: Upon contract expiration, close your position by selling or buying back the same number of contracts at the settlement price.

Types of Contract Trading Orders on MEXC

1. Limit Order: An order to buy or sell a specific number of contracts at a specified price.
2. Market Order: An order to buy or sell a specific number of contracts at the current market price.
3. Stop-Limit Order: An order that triggers a limit order when the underlying asset reaches a specified price.
4. Stop-Market Order: An order that triggers a market order when the underlying asset reaches a specified price.